Lenders that offer long-term installment loans with no credit check required would be the ideal scenario for most borrowers, but do they actually exist?
The short answer is no. Offering long-term business loans without checking an applicant’s credit is simply too much of a risk, especially for a direct lender. In fact, long-term installment loans are actually only available to the most creditworthy of borrowers.
You’ll have to decide whether long-term installment loans or no credit check is more important to you.
If you’re working with a lower credit score, you might have to settle for funding that will check your credit but accepts credit-challenged borrowers. That said, certain types of business financing can be offered up without a credit check.
If you opt to prioritize long-term installment loans over no credit check while negotiating your options, you need to make sure that your qualifications make you eligible for this sought-after business funding.
So, let’s dive into these next steps in your search for business funding.
Here’s your guide to figuring out the next best thing if you want long-term installment loans with no credit check through a direct lender.
If you’ve decided to prioritize the “long term” part of this equation, then you will have to submit to a credit check. But if you’re qualified, long-term loans will provide an affordable funding option that comes with less frequent, smaller repayments.
Nonetheless, because long-term installment loans are particularly hard to qualify for, you should make sure you meet some minimum qualifications before you apply for one.
These minimum requirements will vary by lender, so let’s break them down for the four top small business lenders that offer long-term installment loans.
The online lender LendingClub offers one of the very best long-term installment loan options on the market.
LendingClub’s business term loan product will come with terms that fall within the following ranges:
How to Qualify
It’s clear—LendingClub term loans come with pretty stellar terms, but can your business qualify for them?
If you and your business fulfill the following minimum requirements, then you’re eligible to apply for a term loan from LendingClub:
Another online lender that offers a long-term installment loan product is Fundation.
This lender will offer business loans that carry the following ranges of terms:
Be sure to note that, unlike many long-term installment loans (which will come with monthly payments), Fundation’s term loan will come with more frequent, biweekly payments.
How to Qualify
If Fundation’s term loan sounds like the right fit for you, you’ll just need to make sure you’re eligible by meeting the following criteria:
If you’re looking for even longer-term installment loans, then you’ll likely need to move your search toward SBA loans.
Because their partial Small Business Administration guarantee makes them less risky for lenders, SBA loans typically come with much more ideal terms for small business borrowers—including lengthy repayment terms.
And one of the very best SBA lenders out there is Celtic Bank.
This lender offers SBA loans with standard repayment terms of 10 years. Celtic’s SBA loans will also carry the following ranges of terms:
For all of their advantages, these long-term installment loans will come with one major disadvantage—they’re particularly difficult to qualify for.
How to Qualify
You’ll be eligible for a Celtic Bank SBA loan only if you and your business check off the following three minimum requirements:
If you want to prioritize the “no credit check” part of the equation, you will have difficulty finding viable options.
You’ll have to look to short-term options instead. Your credit is one of the most important ways a lender decides whether you’ll be able to repay the loan. As such, only shorter-term financing products will let a credit check slide.
Though there’s no form of financing that requires no credit check across the board for every single lender that offers it, there are a few that will require a credit check less often than others.
They also happen almost always to be the most expensive type of small business financing on the market, so you’ll undoubtedly have to pay to avoid a credit check. Additionally, if a lender promises you that their funding is “credit check free,” then you might want to proceed with caution.
That said, certain forms of business funding tend to not rely on credit checks, which we’ve listed below.
First up on the list of loans that often won’t require a credit check is invoice financing.
On the one hand, invoice financing will provide your business an advance of up to 90% of the value of your outstanding invoices. Because this type of financing will advance you the value of outstanding invoices that your business is awaiting payment for, their underwriting will be based on your customers’ reliability instead of your own creditworthiness. This means that the application for invoice financing often won’t require your credit to be checked at all.
However, invoice financing can end up costing your business—this type of financing will come with factor fees or discount rates that grow based on how many weeks your invoice is outstanding. Invoice financing and factoring will often come with factoring fees of about 3% plus 1% for each week the invoice is outstanding.
These rates will land at much higher fees than the interest rates of traditional financing, so make sure to check your other, more affordable options before opting for this type of no-credit-check loan.
If you invoice your customers, invoice financing can be a great option for all types of B2B businesses—those looking for startup loans with no credit check or long-term loans with no credit check.
Another type of business loan that will typically not require a credit check is a merchant cash advance.
With merchant cash advances, lenders provide small businesses with a lump sum of capital based on their future credit card sales. This capital is paid back through a daily percentage of the business’s credit card sales until it is paid off in full.
Merchant cash advances are one of the easiest types of financing to qualify for, simply because the terms are so short and rates are so high. As a result, many merchant cash advance lenders will side-step the credit checks during their underwriting processes to differentiate themselves from their competitors. Instead of considering your creditworthiness, they’ll likely consider your business’s credit card revenues as their main deciding factor.
Again, this type of business loan will be one of the most expensive funding options out there. Factor rates typically range from 1.14 to 1.18, and with daily repayments, this financing can become a real drain on your cash flow.
By now you’ve probably realized that no-credit-check business loans aren’t the best funding option out there. Many of these lenders will use a vulnerable situation that many business owners get stuck in—not being able to access funding that you need for your business—and use it to charge huge interest fees.
So, unless you need funding right this moment, it’s almost always worth it to bide your time while building credit in order to access more affordable loans that will require a credit check in the future.
Here’s our recommendation for accessing long-term installment loans in the future.
Step 1: Take on the Most Affordable Short-Term Financing You Qualify For
Though all of your financing options might be less-than-ideal if you’re working with a low credit score, you might need access to business capital right away. If this is the case for you, then make sure to find the most affordable funding option possible to fit your needs. If you opt for a more expensive option, then the next step could be tricky to pull off.
Step 2: Make Your Short-Term Payments on Time, Every Time
As you pay off this preliminary funding, make sure you do so on time and in full. This will help you build or rebuild your credit to open up your future funding options.
If you are unable to make your payments on time, late payments will negatively affect your credit score.
Step 3: Build Credit With a Credit Card
In the meantime, while you pay off your preliminary funding on schedule, you can build your credit even more efficiently by also spending responsibly with a business credit card.
Depending on which business credit card you opt for, this responsible spending can diversify and strengthen both your business and your personal credit. Two options to consider are:
By using your card responsibly, you’ll be able to build your credit faster and show potential lenders that you are a trustworthy borrower.
Step 4: Look Into Long-Term Installment Loans When Your Credit Is Ready
After a little time and a lot of due diligence, you’ll be able to get your credit to a place where it will qualify you for long-term installment loans, even though they will all require a credit check. Once your score hits 620, you’ll be ready to apply for long-term business loans.
In fact, when your new potential long-term lender asks to run a credit check, you’ll probably be proud to authorize it after taking these steps to improve your creditworthiness.
So, what’s the bottom line for long-term installment loans with no credit check requirements?
Well, long story short, they don’t exist, but we hope this guide helped you to make the perfect game plan to find business funding that works for your specific business situation.
Though no credit check business loans do exist, they’ll almost always be your most expensive option. So, unless you need funding right this moment, we suggest you take the time to build credit before taking on debt.
With a bit of responsible spending on the right credit card, you’ll be able to qualify for more affordable business funding, even though it will require a credit check.
Maddie Shepherd is a former Fundera senior staff writer and current contributing writer for Fundera.
Maddie has an extensive knowledge of business credit cards, accounting tools, and merchant services, but specializes in small business financing advice. She has reviewed and analyzed dozens of financial tools and providers, helping business owners make better financial decisions.